A Retailer’s Guide to Loyalty Schemes

Chapter 1: How Loyalty Schemes Boost Revenue

When the cost of living rises, consumers look for ways to cut their household costs. That includes groceries, clothing and other necessities.

Customer loyalty schemes are one way people save money. Customers shop around to find the best price for what they need. The rewards and discounts a loyalty scheme offers can sway where they spend.

What is a loyalty scheme?

Loyalty schemes are a way for businesses to show appreciation to their customers and give them a reason to keep coming back.

The type of loyalty scheme you provide is up to you. We recommend a points per pound programme. It gives your customers one point for every pound they spend with you. You then set rewards based on what your customers like.

Rewards can be discounts, for example 5% off once a customer has collected 500 points. They can also be free products. Product rewards help your business in two ways. Branded goods act as word-of-mouth marketing tools. You can also free up stockholding space by giving slow-moving stock away as rewards.

Customer loyalty schemes aren’t just about discounts or free products. As customers sign up, your scheme collects data that helps you improve your business.

With Reward-It’s loyalty card scheme, you choose the information you collect using custom fields. You could note on each customer’s record whether they buy cat food or dog food. You could also note which location they shop at. The choice is yours.

You can also record how often the loyalty card is used and the customer’s birthday. The built-in marketing platform uses this to send automated emails. These emails can include:

• A reminder when a customer hasn’t scanned their loyalty card in a while
• A prompt when a customer has a high points balance you want them to redeem
• A birthday discount or treat that brings the customer into your shop

Once these automated emails are set up, they run on the data you collect with no further time or input from you.

Benefits of loyalty schemes

Loyalty programmes offer your business plenty of benefits.

New online stores appear all the time. You need to offer your customers something your competitors cannot. Brand awareness alone won’t do that.

A loyalty scheme lets you stand out from your competitors without lowering your prices or spending heavily on marketing. It gives customers an emotional connection with your business and an experience they will remember.

Consumers who feel an emotional connection with a brand tend to be worth more to it over their lifetime. They also recommend it to others by word of mouth.

Customer loyalty schemes also increase profits. Businesses report that a 5% increase in customer retention leads to at least a 25% increase in their profits.

A loyalty scheme is often the deciding factor when a consumer chooses between two competing businesses. 48% of UK consumers say they have joined loyalty card schemes to get extra value on their purchases.

Types of loyalty schemes

Reward-It’s loyalty schemes are customisable, so you can choose the type of scheme that suits your business and your requirements.

You can invest in printed PVC cards that your customers keep with them. These can be standard credit card sized cards or tags that attach to a keyring. Both can be custom designed to match your business’s branding. Your branding is then always on show, which helps word-of-mouth marketing. The drawback is that customers can forget their cards.

Another option with Reward-It’s loyalty software is a digital loyalty scheme. You don’t need to buy printed cards. Customers sign up using the dedicated app, where they have a unique digital loyalty card that is scanned every time they visit your business.

The digital loyalty scheme can run alongside printed plastic cards, as customers can link more than one card to their account. Most customers always have their phone on them. Digital loyalty schemes are preferred by 57% of shoppers.

A customer loyalty scheme adds value to your products or services and encourages consumers to choose you over a competitor. You can also customise the scheme to your requirements.

Chapter 2: Rolling Out A Loyalty Scheme

Small businesses face a particular challenge with customer retention. They rarely have the resources larger businesses put into expensive marketing campaigns. That makes building customer loyalty even more important to their success. A loyalty scheme is one way to build it.

If you want to start a loyalty programme, you have two options: a digital loyalty scheme or a physical scheme using printed loyalty cards. Digital loyalty programmes have grown in popularity. Printed loyalty cards still have a place in the market, especially for small businesses.

Choosing your loyalty scheme

Here at Reward-It, we offer both physical and digital loyalty schemes. If you choose a physical scheme, you can order printed loyalty cards through our in-house printing service. You can create custom designs branded with your business’s style and colour scheme.

Physical loyalty cards are a tangible reminder for customers to come back and make a purchase. This works especially well if your business relies on foot traffic or local customers who may not be confident with technology.

Customers carry the card around and see your logo or branding, which builds brand awareness and loyalty. Physical loyalty programmes may also be more accessible to customers who have less access to technology or digital devices.

We also offer a digital loyalty programme. Digital schemes are more convenient for customers as they don’t have to carry a physical card that is easily lost or forgotten. Customers access their rewards and track their progress through the loyalty app.

Digital loyalty schemes offer better data tracking and analysis. This helps small businesses understand customer behaviour and preferences. In turn, you can make better-informed marketing decisions and improve your customer experience. Digital schemes also cost less to run and are better for the environment than physical schemes, as no physical loyalty cards are produced or distributed.

If you want both a digital and a physical loyalty programme in your business, our cloud-based loyalty software handles both. You can issue digital and physical loyalty cards from the same system, so you won’t need two separate systems.

The right scheme depends on your requirements. Consider which option suits your business and customer base before you decide.

If you would like advice on which loyalty scheme suits you, please contact a member of our expert team, who will be happy to help.

Setting up and marketing your loyalty programme

Once you have chosen your loyalty scheme, it is time to set up a rewards programme tailored to your business. Our cloud-based loyalty software gives you full control over the points and rewards system. You decide how many points your customers get and which rewards they can redeem. The software also builds a customer database, which is useful for marketing.

The software’s customer statistics show you consumer trends and popular products. You can then split your customers into groups and send them emails about their most redeemed rewards. Newsletter-style emails also keep your brand in front of customers.

Marketing your loyalty scheme is crucial, because customers need to know about the rewards and benefits before they can take part. Start with your existing customer base. Send email newsletters, text messages or social media posts announcing the scheme and any special offers or rewards for signing up. You can also mention the programme on your website if you have one and on in-store signage.

Another approach is to incentivise customers to refer friends and family by offering extra rewards or discounts for each new referral. Word-of-mouth marketing is one of the most effective methods. Asking customers to refer a friend brings the chance of even more loyal customers.

Combining these approaches helps more customers join your scheme. That leads to more sales, better customer retention and business growth.

Chapter 3: Types of Cards: Digital, Physical and Key Tags

Once your loyalty scheme is in place, your customers need a way to use it. You issue loyalty cards with a unique QR code that is scanned at the transaction point so customers collect points.

Loyalty cards come in several formats to suit your requirements. You can choose printed cards (standard CR80), combi cards (a CR80 card plus a key fob) or individual key fobs. You can also make your scheme entirely digital, with customers collecting points using a QR code on their phone.

The option you choose depends on what you want to get out of your loyalty scheme.

Custom printed cards

With custom printed loyalty cards, you create your very own design that represents your business.

You can add your logo, custom text and any other assets that suit your business. We recommend using your standard branding, such as your colour scheme and fonts, for continuity with your business. Customers then recognise their loyalty card easily. It also reinforces brand awareness.

Several print processes can help your printed loyalty cards stand out, including:

• Hot foil
• Spot UV
• Magstripe

All these features can be used with either of two finishes: matt or gloss.

For a more traditional approach, you can print your designs on standard credit card sized cards (CR80). You can print your own design on both the front and reverse and include more information.

Alternatively, you can hand out key tags to your customers. These small plastic tags attach to a keyring or lanyard. Customers are less likely to forget their card when it is attached to their keys. The print area is smaller. You can still put a personalised design on the front and the unique QR code on the reverse.

We also offer combi cards, which give your customers both a standard credit card sized card (CR80) and a key fob. They are attached when issued and snap apart easily. Your customers can keep one in their purse or wallet and one on their keys or lanyard.

Digital loyalty cards

If you want to improve your sustainability credentials or make your loyalty programme entirely futureproof, you can offer your customers digital loyalty cards through a smartphone app.

A digital loyalty card carries a unique QR code in the same way as a printed loyalty card. It is linked to the user’s account. The app also shows your customers their points balance and any rewards available.

You can also use printed and digital loyalty cards together, as customers can link more than one QR code to their account. Most people carry their smartphone at all times, so they can still collect points if they forget their loyalty card or tag.

Thinking about a loyalty or gift card scheme for your business? See our gift and loyalty solutions, or get an instant quote for custom printed gift and loyalty cards.